ASG LegalTech, the company that owns cloud practice management platforms PracticePanther, Bill4Time and MerusCase, has acquired Headnote, the online payments platform that provides e-payments and accounts-receivable management for law firms.
At the same time, ASG LegalTech is announcing the first fruit of this acquisition — a fully integrated, all-in-one payment system within the PracticePanther platform called PantherPayments.
In an exclusive interview for my LawNext podcast, the CEO of ASG LegalTech, Soumya Nettimi, and the cofounder and CEO of Headnote, Sarah Schaaf, sat down with me to discuss the acquisition and what it means for the two companies and their customers. You can listen to our conversation above.
The acquisition is the fourth in three years for ASG LegalTech and the 28th for its parent company Alpine SG (ASG), a portfolio company of the San Francisco private equity firm Alpine Investors. ASG acquired Bill4Time in 2017 and PracticePanther in March 2018.
In February 2019, it merged the two companies to create a unified legal technology business, ASG LegalTech, and a month later, it acquired another practice management company, Merus Inc., developer of MerusCase. Today, the company says, it serves more than 30,000 lawyers and law firms across the world.
Schaaf, a former practicing attorney, founded Headnote in 2016 together with Thornton Schaaf, who is head of product at Headnote, and Matt Crampton, Headnote’s chief technology officer.
She will join ASG LegalTech as general manager of payments, where she will lead payments-related initiatives across the company’s portfolio. The other two founders will also remain, along with all other Headnote employees.
Headnote sought to distinguish itself from other payment products for lawyers through a mix of features that ensured compliance with bar and IOLTA requirements while charging the lowest fees in the legal industry.
For more on Headnote, see: LawNext Episode 17: Headnote Founder Sarah Schaaf on Simplifying How Lawyers Get Paid.
In our LawNext interview, Nettimi said that two factors drove her company to want to acquire a payments platform. One is that their philosophy is to serve as a one-stop shop so customers do not have to find different products for the various functions and tasks they need to do to manage their firms.
The other is that they try to listen to their customers about what they need, and in this year of the pandemic, “where getting paid is synonymous with staying in business for many of our firms,” customers wanted a solution that would help them increase both collection rates and speed of collection.
As they considered whether to build a payments platform or acquire an existing technology, they decided to buy Headnote after concluding it was the “best payment offering” in the legal market, Nettimi said. Headnote is “the most modern and compliant technology available” and is “a disruptor in the market and has features that no one else has, like cutting-edge analytics, instant e-check, and a seamless onboarding experience.”
What she is most excited about, Nettimi said, is that they plan to use Headnote’s technology to build a fully native payment solution within each of their practice management platforms. “So what this means is customers will have a seamless experience already built into their current workflows, so they never have to leave their practice management system in order to manage their payments.”
As for Schaaf, she said that she and her cofounders were attracted to the deal by the potential it offered to bring the value of their product to a wider audience. “We really feel like our technology makes a big difference [to lawyers] in how they practice and how their business can grow,” she said.
Partnering with ASG LegalTech, Schaaf believed, offered the best way to do that because of the exemplary platforms they already had and their vision of delivering to their customers a one-stop set of integrated solutions. By doing that, she said, they would be able to bring more value to users and also have the ability to layer on more features to help users with more of their back-end processes.
With today’s announcement of its acquisition of Headnote, ASG LegalTech is also announcing the launch of PantherPayments, an all-in-one payment system that is fully integrated within the PracticePanther platform.
Eventually, the company will roll out similar integrations in its Bill4Time and MerusCase platforms, both of which remain separate, standalone products.
The company says that PantherPayment’s features include:
- Full compliance with IOLTA, ABA, and lawyers’ online payment rules in all 50 states, as well as with payment card industry standards.
- Low, simple and transparent pricing of 2.8% for all credit cards and 1% for same-day e-check payments, with no monthly membership fees or variable rates.
- Fast payments, with clients paying invoices up to 70% faster than average and with more payment options than other processors.
- Integration with the PracticePanther platform, eliminating the need for dealing with multiple systems or vendors and providing a single source for support questions.
- Strong security, with SHA-256 data encryption, cloud-based hosting, and tokenized payments.
“They’re never going to have to leave PracticePanther,” Nettimi said. “It’s not an integration, like many other integrations that exist out there for payments and for many other areas. They’re going to be able to do everything in their PracticePanther app — from request payments, to logging them, to analytics, to refunds if they need to do that, to tracking things. … Simplistically, that’s what makes it so different than what is already out there.”
Even as these integrations are rolled out, Headnote will remain a standalone product, continuing to serve its existing customers and welcoming new customers, Schaaf said.
Customers will benefit from even stronger support and further infrastructure development, she said.
When many of the practice management platforms available today first came to market, electronic payments were an afterthought, as they were not yet in wide use among law firms. But today, that has changed, especially in the era of the coronavirus crisis. Firms and clients alike expect the convenience of paying invoices electronically.
Even so, some practice management products rely on third-party payment platforms rather than offer a fully integrated option within their own platform. That can be clumsy and inconvenient in some cases and result in incompatibility for some functions.
For customers of any of ASG LegalTech’s practice management products, bringing Headnote into the fold should be welcome news. It has developed a reputation as a trusted and easy-to-use payment platform with transparent and straightforward pricing. Having that technology directly integrated into a practice management platform will no doubt prove to be convenient and useful for customers.
As for customers of Headnote’s standalone product, they should benefit from the fact that ASG LegalTech is a larger company that will be able to provide ongoing support and development, with the resources to do so at even a higher level than before.
For these reasons, the acquisition appears to be a good move for all concerned. For the two companies they seem to be a good fit in terms of their products and cultures, and Headnote’s technology fills an important need for ASG LegalTech’s customers. For customers, whether of ASG LegalTech or Headnote, the acquisition should result in an overall better product for them.